Barclays cuts forecast for notebooks

BEARISH SENTIMENT:：Windows 8 demand might be weaker than expected, after some Windows 8 models’ delayed launches, and there is strong competition from the iPhone 5

By Amy Su / Staff reporter

Thu, Oct 11, 2012 - Page 13

Barclays Capital PLC yesterday cut its forecast for the sequential growth of global notebook computer shipments in the fourth quarter to 8 percent, from the 12 percent it estimated previously, after several companies in the PC sector recently became more bearish about this quarter.

The downside risk may therefore end the recent spike in share prices of PC-related companies in Taiwan, the foreign brokerage said in its latest report.

“Although notebook shipments in October should remain solid, companies are turning more bearish for November and December,” Barclays Capital IT hardware research head Kirk Yang (楊應超) said in a report issued yesterday.

The lack of expectation of strong demand for Windows 8 was the main downside risk for notebook shipments in the fourth quarter, following the launch of some Windows 8 models being delayed until next year, Yang said.

Meanwhile, the strong performance of Apple Inc’s iPhone 5 and a bigger selection of cheaper tablets during the period may also challenge the notebook market, he added.

Those downside uncertainties made Barclays Capital lower its sequential growth forecast for notebook computer shipments in the fourth quarter to 8 percent, slightly better than the normal seasonality of more than 6 percent.

The brokerage forecast shipments for desktops and computer motherboards would post a 10 percent sequential decline in the fourth quarter, compared with its former forecast of an 8 percent decrease, due mainly to higher inventory in channels.

As a result, Yang said he held a more cautious outlook for PC-related stocks in Taiwan, adding that the launch of Windows 8 products on Oct. 26 would be a key factor for investors to decide whether to load up on more of these shares.

The Barclays report came after notebook producers reported shipments were up 25 percent from August, with shipments in the third quarter showing a sequential decline of 2 percent, lower than the brokerage’s zero-growth forecast and normal seasonality of 16 percent growth.

Shipments for desktops and computer motherboards posted a 4 percent decline for last month from August, while third-quarter shipments were up 7 percent from a quarter earlier, slightly below Barclays Capital’s forecast of 8 percent growth and normal seasonality of a 9 percent rise.

In related news, Compal Electronics Inc (仁寶電腦), the world’s second-largest contract producer of notebooks, on Tuesday said its consolidated revenue was NT$64.52 billion (US$2.19 billion) last month, its highest level since March last year, as channels started to stock up for the Christmas holiday shopping season.

The figure was up 24.7 percent month-on-month and 12.9 percent year-on-year, the company said in a statement.

Compal shipped 4 million notebooks last month, which drove third-quarter notebook shipments to about 10 million units, up 7.45 percent from the second quarter, the company said.

Accumulated revenue totaled NT$498.47 billion in the first nine month of the year, down 4.2 percent from a year earlier, company data showed.